Trump's most-favored-nation drug pricing program was supposed to be the biggest reset in American pharmaceutical costs in a generation. The White House says 17 of the world's largest drugmakers have signed on, representing 86% of the branded drug market by sales, and projects $64.3 billion in savings over the next decade. But the companies developing most of tomorrow's new medicines are quietly walking away, and that number may not survive contact with reality.

The program works like this: participating companies agree to charge Medicaid the same price that other wealthy countries pay for their drugs, instead of the much higher U.S. price. Medicaid covers more than 80 million low-income Americans and cost the federal government alone $60 billion in drug spending in 2024. The appeal is obvious. The gap between what Americans pay and what, say, Germany or Japan pays for the same pill has been a source of public outrage for decades.

Big pharmaceutical companies, with sprawling portfolios and huge Medicaid volumes, could absorb lower prices on some products while protecting margins on others. They had leverage to negotiate, and they used it. The deal details remain private.

Smaller companies have no cushion

Mid-sized and smaller drugmakers face a different calculation entirely. Brett Monia, CEO of Ionis Pharmaceuticals, told Reuters his company had been invited to participate but found no compelling reason to join. "We don't have the breadth of drugs on the market that we can cut deals," he said. "But at the end of the day, we don't see the upside of cutting a deal."

That logic is straightforward. A large company that cuts prices on one blockbuster drug can offset the hit across ten others. A mid-sized company with two or three products in Medicaid can't. One industry lobbyist, speaking anonymously because they weren't authorized to speak publicly, put it plainly: "There is no real upside," adding that companies would likely "steer away" from any voluntary initiative that limits pricing autonomy.

Of the 19 mid-sized companies contacted by Reuters, only Japan's Astellas confirmed it had applied. Germany's Bayer and Japan's Daiichi Sankyo said they were still reviewing their options, having already missed the application deadline. The other 15 either declined to comment or didn't respond.

The Centers for Medicare and Medicaid Services extended the application deadline twice before closing it on June 11, three months after the original cutoff. That kind of extension usually signals soft demand.

Why the math gets shakier from here

The $64.3 billion savings figure deserves scrutiny on two fronts. First, it's a 10-year projection built on a 5-year pilot, meaning the second half is essentially extrapolated. Second, roughly half the savings are supposed to come from state governments, which have until September to decide whether to participate at all.

Here's what that means in practice: if states opt out, or if mid-sized companies stay on the sidelines, the drugs that patients actually need most urgently, often the newer, specialized therapies that smaller biotechs develop, may not be covered by the pricing agreements. The big-company deals lock in cheaper prices for the established drugs that are already widely used. The next generation of treatments may come with the same old price tags.

Monia made a pointed observation to Reuters: mid-size companies like his account for the development of most new innovative medicines. If those companies calculate that the program costs them more than it earns them, they won't sign. And no executive can be compelled to volunteer for a deal that damages their company.

The program remains the most concrete step any administration has taken to close the price gap between the U.S. and the rest of the developed world. But closing 86% of the existing branded drug market is not the same as closing the gap on future drugs. The medicines that don't exist yet, or that are still in trials, are the ones where pricing power matters most. And right now, the companies that make them are watching from the sidelines.